Bridge loan or fix and flip loan? The renovation decides it.
Both are short-term loans for investors, decided on the property and not on tax returns. A bridge loan buys or holds a property that needs little work. A fix and flip loan does the same and also finances the renovation, released in draws as the work is done. If you are renovating, you want the second.
Bridge and fix & flip, side by side.
| Term | Bridge loanBuy or hold | Fix & flip loanBuy and renovate |
|---|---|---|
| What it is forThe job. | Close on a property before long-term financing is in place | Buy a property, renovate it, then sell or refinance |
| Renovation moneyWho pays for the work. | Not part of the loan | Up to 100% of the budget, released in draws |
| How it is sizedWhat the loan amount is measured against. | The price or the value as it stands | The price, the total cost and the value after the work |
| DrawsMoney released after closing. | None | In-house, funded in minutes, virtual or on-site inspection |
| What you sendBeyond the contract and entity papers. | The plan and the way out | A line-by-line budget and your contractor |
| TermHow long it lasts. | Short, to the sale or refinance | Up to 24 months |
| If it runs longThe extension. | 0.5 points per 3 months | |
| Way outHow it is paid off. | A sale, or a 30-year DSCR loan once it is rented | A sale, or a 30-year DSCR loan if you keep it |
Both are business-purpose loans on non-owner-occupied property.
Which one fits your deal.
| Term | The loanthe answer | Whythe reason |
|---|---|---|
| A house that needs a new kitchen, baths and floorsA classic flip. | Fix & flip | The work is financed and released as it is done |
| A rented building you must close on in two weeksA fast purchase. | Bridge | No work to finance; speed is the point |
| A vacant property you will lease up, then refinanceStabilize it first. | Bridge | It carries the property until the rent supports a DSCR loan |
| A light refresh: paint and cleanupLittle work. | Either | If you can pay for the work yourself, a bridge loan is simpler |
| Building on a lot, or a gut to the studsMore than a renovation. | Neither: a construction loan | Ground-up construction is its own program |
Tell us the property and the work. We tell you which loan fits before you apply.
Bridge loan and fix and flip loan questions
Is a fix and flip loan a bridge loan?
It is a kind of one. Both are short-term loans that carry a property to a sale or a refinance. A fix and flip loan adds the renovation money and the draws that release it.
Does a bridge loan include rehab money?
Not as we use the word. If the renovation needs financing, a fix & flip loan covers it.
How is each loan sized?
A bridge loan against the price or the value as the property stands. A fix and flip loan against the price, the total cost of the project and the value after the work.
How do draws work on a fix and flip loan?
You finish a stage of the work, request a draw, and it is inspected and funded. We run draws in-house and fund them in minutes. How our draws work.
Are both called hard money?
Yes. "Hard money" is the everyday name for short-term, asset-based loans from a private lender. The hard money guide.
Which is faster to close?
A bridge loan has less to review: there is no budget or contractor. Either can close in as little as two weeks on eligible deals.
Can I refinance either into a DSCR loan?
Yes. Once the property is rented, a 30-year DSCR loan pays off either one, with the same team.
Do I need experience for either?
No. We work with first-time investors; completed projects improve your terms.
Not sure which loan the deal needs? Send it to us.
The property, the price and the work. We tell you which loan fits, or price it yourself in the term sheet tool.
*For business-purpose loans on non-owner-occupied investment property only. Not available for personal, family or household purposes. All loans subject to credit approval, underwriting and property eligibility. Rates, leverage and terms are indicative, change without notice, and not all borrowers will qualify; not a commitment to lend. YS Capital Group · NMLS ID 2609746 · Equal Housing Lender.